RWC 2011 is the International Rugby Board's party

by Jane Clifton / 03 September, 2011
The tournament's dark secret is that the IRB retains most of the cards.

It seemed like a good idea at the time. There was even a bit of dancing in the streets. But could it be that the Rugby World Cup is actually the most effective anti-National tactic Labour ever conceived (even if it didn’t mean it that way at the time)? The prize secured in 2005, with wholehearted Labour Government backing, has come to fruition at an absolute pig of a time, in fiscal and economic terms. Ticket sales are underwhelming because travelling to the end of the Earth for a sports tournament is a massive luxury in the post-credit crisis world. The Reserve Bank has complained the economic benefits initially predicted were “wildly overestimated” – and when central bankers resort to adjectives, you know we’re in a spot of bother.

The International Rugby Board and its commercial agent, IMG World, have behaved at times as though they had been given the mortgage on New Zealand’s sovereignty. And a host of pratfalls by corporate hangers-on to the event has brought this country global mockery. (Just for the record, we will be rooting for the All Blacks in all senses of the word.) But perhaps the biggest risk, politically, is that our politicians are anticipating the event with all the restraint of 12-year-old girls outside Justin Bieber’s hotel.

Auckland Council has only just pulled itself together and decided not to put $2 million aside for “unforeseen events” at the Cup – presumably having forgotten at an earlier point that managing unforeseen events is an ineffable part of the billion-dollar governance of a large city, and a special fund is not needed for the purchase of emergency spare underpants.

The council has also spent a fortune on the Wynyard Loop, a pair of handsome trams that take tourists on a pricey 15-minute tour of a prized downtown area – never mind that the area still consists of carparks, building sites and Portaloos. RWC plot-loss is reaching epidemic proportions, and although little enough of it is attributable to or preventable by the Government, it’s the Government that will be blamed.

The dark secret of this tournament is that the IRB retains most of the cards. We may be hosting the show, but it’s the IRB’s party. This deal is equivalent to lending someone your house for a function, then finding the party-thrower has the power to chuck your furniture out and make you pay for its replacements, and demand the first-born of each guest as the price of admission.

The draconian advertising restrictions enacted to protect sponsors’ supremacy around game venues are just the tip of the iceberg. IRB agents have, for instance, menaced a garage for advertising “All Black tyre” specials – never mind that tyres are literally all black, and that a few discounted retreads are hardly likely to deprive rugby of its operating budget. This sort of micro-policing is likely to become endemic when the games are under way, and risks taking the edge off the fun. This country will be engulfed in All Blacks mania and every business will be looking for an angle – more out of patriotism and joy than for commercial reasons. This is actually a brand enhancer for the event, rather than a usurpation – but IMG isn’t wired to see things that way.

Equally, the $30 million shortfall in expected ticket sales will seem to the average person a cue to strike some discount deals. But the IRB is not attuned to the concept. Given this organisation is so hard-nosed, it even expected to be able to dictate what colour T-shirts our volunteer hosts will wear (that we, not the IRB, would pay for), we can expect no quarter to be given on the financial front.

None of which is the fault of any politician. On the contrary, there would have been a popular uprising had the previous Government said no to hosting the RWC. But it is an ugly position for any Government to be in – essentially in the power of a commercially focused, fantastically wealthy and utterly unsentimental sporting franchise. (And let’s not overlook that Labour – again inadvertently – saddled this Government with a contractual obligation to give Team New Zealand $36 million for the next America’s Cup bid.)

The political risk may be marginalised by the infectious hoopla about to erupt. Prime Minister John Key’s perma-photo-op life will move to a new gear, with not just sports stars, but legions of world statespeople and celebs likely to waft into shoulder-rubbing orbit. It’s possible British Prime Minister David Cameron and French Prime Minister Nicolas Sarkozy could head this way, among other luminaries – United Nations chief Ban Ki-moon already having been confirmed. But this happy hobnobbing could come in unfortunate juxtaposition if ugliness flares over price-gouging, or monstering of harmless small-business proprietors.

And although it’s probably not widely realised, the honour of hosting such tournaments is rarely matched by the riches. What taxpayers are shelling out is not even close to being offset by the wealth the event is likely to generate.

The Reserve Bank is sticking with its estimate of $700 million in extra spending, which sounds like a bonanza. But the other side of the ledger is the crowding-out of other tourists’ spending, and all the extra money that will have been spent on imported goods to service the extra tourist influx. The cost to the taxpayer is officially estimated to be over $300 million, and there is no way the revenue generated far and wide by the event will find its way directly back to the taxpayer in any meaningful quantities. Ticket sales are expected to return well over $200 million – but not to us. The cost to Auckland ratepayers alone will have topped $100 million by the close of play – notwithstanding “unforeseen circumstances”.

Although hotels, restaurants, cafes, taxis and shops will experience a boom and thereby pay more GST and income tax, the money-go-round is more centrifugal in impact than circular. The Government will be out of pocket for the cost of a bloody great party, at the very time it is axing jobs, cutting budgets and tightening the screws on beneficiaries, and asking to be re-elected. Again, not its fault, and no reasonable person could propose the counterfactual, of a “no thanks” to the event back in 2005. But horrible, horrible timing.

And that’s not even factoring in the worst-case scenario. A loss. To Australia. We’d all be wearing black if that happened, including the sponsors. Key blithely assures us research has found no correlation between governmental fortunes and major sports tournament results worldwide. But there is madness in the air. It is now possible to buy “limited edition!” nappies with All Blacks logos on. You don’t have to be a Wiccan to worry that is tempting fate with unfortunate symbolism.

Can anything be ruled out? Surely a case can be made for holding the Government responsible for an All Blacks loss – perhaps because it has fostered the kind of society in which $200-plus replica jerseys, abstinence campaigns and Sonny Bill Williams are possible?

This writer will be as dippy and doting as the next person when the event is under way. But it’s going to be hard to forget the feeling of being had rather cheaply over the IRB’s revelation there are in fact two William Webb Ellis trophies, of identical manufacture and equal status. This is like finding out there have secretly been two Koh-i-noor diamonds all along, or a spare Shroud of Turin; or that the statue of David has a body double. At that rate, I vote we tell the world that was Sean Fitzpatrick’s evil twin in the obscene pink thing.
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